New Sharon, Maine

The Top of the Hill Grill here is 65 miles away from the coastal summering hole and old-money hangout of Boothbay Harbor​—​and a world apart. Stop by for breakfast, and you’ll be surrounded by guys in blaze orange, retired couples who get their blueberry muffins toasted, and an oil burner repairman who moonlights as the Karl Rove of the Maine GOP. I’m here a few weeks after the November elections to find the remarkable story behind an improbable headline in the New York Times: “Overnight, Maine Turns Red.” For the first time since 1964, Maine Republicans captured the governorship, the senate, and the house​—​a trifecta made possible, boasts GOP mastermind Charlie Webster as he chews on his ham and cheese omelet, because “we represent the working people” and were able to convince voters of this.

Sixty years ago, Maine and New Hampshire shared more than a border and their Yankee heritage. Their per-capita income was similar, and so was state government spending as a share of the state’s economy. But, starting with Maine’s decision to impose a sales tax in 1951, two roads diverged in a fiscal wood. In the decades since, the Granite State has not imposed a personal income or sales tax, while Maine has taken the road of higher taxes and greater regulation. And that has made all the difference for the two states’ economies.

By 2009, the share of personal income that Maine residents receive from all government sources was over 36 percent; for New Hampshire, the figure was only 24 percent. As Tarren Bragdon, the baby-faced CEO of the free-market Maine Heritage Policy Center, explains, “Every time there was an opportunity to choose between self-sufficiency and dependence, the state chose dependence. And at the same time you had an increasing social safety net, you had increased hostility toward small business and entrepreneurs.”

The results include: no private job growth in a decade, a ranking by Forbes as America’s least business-friendly state, and an increase in welfare dependence such that nearly one of three Mainers receives some form of government assistance. As newly inaugurated governor Paul Le-Page sums up the preconditions for the GOP victory: “High taxes, unreasonable regulation, high unemployment .  .  . and the stars were aligned.”

A few political groundswells helped move those stars into position. In 2006, antitax forces led by longtime citizen activist Mary Adams, a grandmotherly, northwoods Grover Norquist, succeeded in placing a Taxpayer Bill of Rights initiative before Maine voters. The proposal would have capped any increase in state and local government spending by the amount of inflation and population growth unless voters approved it directly.

The initiative went down to defeat ​—​290,000 votes to 247,000​—​with considerable spending by special interest groups that opposed it. But the message of limiting government was heard​—​a tocsin sounded again when Bragdon’s think tank sponsored a second, also unsuccessful vote on a Taxpayer Bill of Rights.

Then in June 2009, the Democratic legislature passed a package of tax changes that would have lowered the top income tax rate from 8.5 percent to 6.5 percent, while creating 102 new taxes, chiefly on services, such as auto repair and dog grooming.

It sounded to some like a reasonable reform; even the Wall Street Journal’s editorial page weighed in favorably. But GOP state chairman Charlie Webster saw an opening wide enough to drive his 1997 Ford pickup through. Webster saw the new taxes as essentially a tax on labor and working people. The exchange amounted to “trading a temporary cut in income tax for permanent addition of new taxes.” In Maine, acts of the legislature can be forced to a referendum if opponents are able to garner enough signatures. “We got 70,000 signatures in 70 days,” Webster says. The tax package would be put to a statewide vote in June 2010​—​the same day as the party primaries.

Webster put his pedal to the metal. Driving around the state, he set about the task of recruiting Republicans to contest each of the state’s 186 legislative districts. He wanted hairdressers, plumbers, homemakers. “We looked at some who had no experience in elective office but were leaders in the community.” Webster recruited a half-dozen small business candidates by telling them the new taxes would put them out of business. “We would say, ‘This is where we are, this is where we’re going,’ and ask if they were happy with that.”

One of the candidates who definitely wasn’t happy was Amy Volk, a 40-year-old homemaker and small business owner in the southern Maine town of Scarborough. Amy and her husband Derek had watched with dismay as businesses left Maine. To them, the state government’s bias against business was symbolized by Senate president Libby Mitchell’s proposal to guarantee five days of paid sick leave for employees at private firms. Amy Volk had never so much as run for student council, but she plunged into politicking and quickly found she loved going door-to-door to talk about issues and ask for votes. She was one of 185 candidates the GOP fielded.

Among those who turned out on primary day, Webster estimates there were 16,000 newly registered Republicans. When the results came in, the tax reform had been overturned by 61 percent to 39 percent, a new crop of legislative candidates had already been out talking to voters, and Republicans had chosen a candidate for governor grounded in the tough realities of Maine’s working people.

Born to a Francophone family in the “Little Canada” neighborhood of mill town Lewiston, Maine, Paul Le-Page was the oldest son in a family of 18 children. When he was 11, his father beat him severely, then took Paul to the hospital, giving him a 50 cent piece and instructions to tell the doctors he had fallen down the stairs. Paul kept the coin but did not return home. He lived on the streets for two years, working odd jobs, then crashed with two families that alternately took him in. (His siblings who stayed at home remain to this day, he says, in Maine’s welfare system “big time.”)

Le-Page got into college with help from Olympia Snowe’s late husband Peter and eventually earned an MBA from the University of Maine. He also started a business career. For the last 14 years, he has run retailing icon Marden’s (slogan: “Where the elite meet and misers mingle”), and for the last 8 also served as mayor of the Democratic stronghold of Waterville.

What made Le-Page run for governor? “Anger​—​anger at govern-ment,” he says. His platform focused on getting Maine working again, with the promise to reduce unproductive state regulation and red tape, reform the state’s welfare system, and reduce the size and scope of state government. Le-Page drew on his business experience, comparing the careful budgeting of Marden’s with overspending in Augusta and promising to bring business practices and principles to state government. “We have to change the attitude that business is bad, because without business there are no profits to run the place.”

In a three-way race with Democrat Libby Mitchell and Independent Eliot Cutler, it was Le-Page’s rough-hewn style (“I can put my foot in it”) and up-by-the-bootstraps personal story that connected with the working people Charlie Webster was targeting. In the legislative races, GOP candidates focused on ideas, not personalities. “I told my guys, if it becomes a popularity contest, we’re not going to win,” says Webster. “We beat Democratic incumbents by talking about issues and saying, ‘Whoever is in there is a nice guy, but on these critical issues we disagree.’ ” According to Le-Page, in the last weeks of the campaign, the message that Maine had to make changes to create jobs seemed to break through: “Everyone looked in the mirror and said, No wonder it’s tough around here .  .  . no wonder we’re unemployed .  .  . no wonder people are leaving instead of coming.”

On Election Day, voters gave Le-Page a decisive 38.3 percent of the vote, Republicans took the senate 20 to 14 with 1 independent, and​—​in a surprise to everyone but Webster​—​took the house 78 to 72 with 1 independent. Amy Volk won her seat, one of a handful of freshmen who were new to politics. They prevailed despite being considerably outspent by special interest groups. (The biggest Democratic donor in Maine is a hedge fund manager from the northwoods of Greenwich, Connecticut.) Maine Republicans seemed to triumph as the party of the working people.

Yet there is little triumphalism among the victors. Maine’s new political leaders are starting their jobs with Yankee practicality and what Le-Page calls “everyday common sense.” As much as the governor would like to lower tax rates, for instance, the budget gap he inherits prevents that from being seriously considered. Instead, he is laying out a sequence of small steps​—​lowering taxes for retirees so they don’t leave the state, raising the minimum taxable income to the living wage so people can manage, reducing regulations so business will prosper and the state’s revenue base will grow. Welfare reform and regulatory streamlining will be priorities, and the new administration has vowed to overhaul the “disaster” of the state’s Dirigo health plan. Le-Page wants to allow Maine’s natural advantages​—​its fisheries, forests, and farms​—​to be economic advantages once more. “We will work with inland wildlife to get them to allow bears to sh— in the woods again,” he says with a laugh.

Maine Republicans seem well aware that they have a limited time to deliver on these promises. “It’s no different than a private turnaround,” says Le-Page, “18 to 24 months.” Mainers are accustomed to a steady trickle of people leaving the state. Charlie Webster relates that his two daughters have left, “and if we can’t change Maine in four years, then I am out of here.” Tarren Bragdon, now working for Le-Page, says, “We are one of the oldest, whitest states. .  .  . We’re like Japan, facing the dynamics of a demographic winter. The easiest way to deal [with that] is to make Maine a place where people want to move.”

Along with the realism, there is an undercurrent of Reaganesque optimism, a kind of “morning in Maine” spirit. Le-Page doesn’t expect the state to hit the top ten list as a place for business investment anytime soon. “But if the cost of doing business is comparable to New Jersey or New York, our quality of life will make the difference.” And presiding at the Top of the Hill Grill, Charlie Webster looks to the next electoral cycle and vows, “We’re going to make it much deeper red.” Maine is a unique state, yet the electoral success of the state GOP’s “working people vote Republican” strategy may point the way to party comebacks elsewhere.

Soon after the November vote, newly elected state representative Amy Volk drove up to Augusta for a meeting with the incoming Republican legislators, both old and new, to start planning their priorities now that they were at long last in the majority. “I met all these Republicans who had been waiting for it, planning for it, praying for it,” says Volk. “And it wasn’t, ‘Oh my God, what do we do now?’ It was: ‘Oh my God, now we get to do stuff!’ ”

Conrad Kiechel is a Washington-based writer and partner at OnPoint Strategies.

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